Mumbai, Sep 11 (IANS) India’s current account deficit in the first quarter ended June narrowed to $6.2 billion, or 1.2 percent of GDP, as compared to $7.8 billion in the corresponding quarter of last fiscal, on the back of a fall in trade deficit, it was announced on Friday.
“This improvement was mainly on account of the merchandise trade deficit ($34.2 billion during Q1 of 2015-16), which contracted on a year-on-year basis due to a larger absolute decline in merchandise imports relative to merchandise exports,” the Reserve Bank of India (RBI) said in a release here.
The trade deficit in the same period a year ago stood at $34.6 billion.
“The reduction in the CAD was also enabled by higher net earnings through services and lower outflow on account of primary income (profit, dividend and interest),” the central bank said.
The balance of payments, at a surplus of $11.4 billion during the quarter in question, was marginally higher than the accretion in the corresponding quarter of last year at $11.2 billion.
Private transfer receipts, mainly representing remittances by Indians working overseas, amounted to $16.2 billion, a marginal decline from $16.4 billion a year ago.
NRI deposits received by commercial banks during the quarter at $5.9 billion were more than double the net inflow into these accounts in the same quarter of last year, the RBI said.
It said that in the financial account, net inflows of foreign direct investment were higher on a year-on-year basis.
“However, portfolio investment declined sharply, almost entirely in the debt segment,” the RBI added.
In the previous quarter ended March, the country’s current account deficit narrowed sharply to $1.3 billion, or just 0.2 percent of GDP, as compared to $8.2 billion in the quarter ended December.